Proponents of Web3, a catch-all term widely used to incorporate the concepts of decentralized networks, cryptocurrencies and other blockchain-powered applications, have a grand vision for the future of the internet and global finance. .
One thing stands in the way: the lack of people to make it happen.
Late last year, when bitcoin and a handful of other cryptocurrencies peaked, around 18,500 developers were contributing to open-source Web3 projects every month, according to a report by the company. crypto-focused investment firm Electric Capital.
That number is “at an all-time high and growing faster than ever” – with around 60% of Web3 developers entering the industry in 2021 – writes Electric Capital partner Maria Shen, but it’s a share of the global total. software engineers, which stood at 31.1 million in the first quarter of 2022, according to developer analytics firm SlashData.
Facebook, Amazon.com and Google, the biggest internet companies today, dubbed Web2 by cryptophiles, each have more than 20,000 software developers, according to various estimates. But they outnumber staff at firms like JPMorgan and Citigroup, both of which say they employ more than 30,000 people on projects for their financial services businesses.
Crypto insiders might shrug their shoulders at this juxtaposition, replying “we’re still ahead” – one of the industry’s favorite refrains – but some see this chasm as a major obstacle to realizing Web3’s promises. .
“When Citigroup would employ 30,000 developers, but there are only several thousand active blockchain developers per month, this lack of developers seems insurmountable,” says Jay McCarthy, co-founder and chief technology officer of the development company. of blockchain Reach.
“Blockchain has extreme potential, but if we don’t get more developers realizing their dreams, that potential will never be realized,” echoes Chris Swenor, CEO of Reach and co-founder of McCarthy.
They identified a high barrier to entry as the main reason for the shortage. Not only does blockchain development often require knowledge of specialized programming languages like Solidity or Rust, used to implement smart contracts on Ethereum and Solana, but fundamentally, “it’s a whole new technology that requires a change of behavior,” says Swenor.
He and McCarthy founded Reach in 2019, from their Boston homes, for this very reason. The company, backed by the creators of the Algorand blockchain, provides developers with a toolkit that helps them reduce the cost and time spent developing applications, including decentralized autonomous organizations (DAOs), by up to 85%. and non-fungible tokens (NFTs), two key building blocks for most visions of Web3. “We’re trying to lower that barrier and simultaneously raise the ceiling of what’s possible because people are willing to be more ambitious and try to take on more if they have the support,” says McCarthy. .
At first glance, the gap between the demand and supply of programmers needed for an Internet overhaul is obvious. It is hardly possible to name a web3 or blockchain company that is not actively looking for developers. Last month, popular jobs website Indeed listed more than 600 jobs for software engineers, software architects, full-stack and back-end developers that featured the words “cryptocurrency,” “blockchain.” , “bitcoin” and “ethereum” in their descriptions. TrueUp, the tech job analytics platform, estimated 9,715 open crypto jobs at the start of the summer, with a third of them for software engineering positions.
However, blockchain heavyweights say they face a different set of challenges.
Protocol Labs, an open source research and development lab known for its decentralized data storage projects such as InterPlanetary File System and Filecoin, is looking to hire about 50 software engineers but has no shortage of candidates, according to Dietrich Ayala, its responsible for the browser ecosystem. and platforms.
“I think a better question would be, is there really a dearth of developers or is there a dearth of devs capable of thinking about what the next generation of the Internet will look like? And that’s is a more difficult task from a recruiting perspective,” says Ayala, who previously spent more than a decade at web pioneer Mozilla.
The mindset is especially important for companies working on the core technology of Web3 – blockchains that underpin applications like NFTs and decentralized marketplaces. “There is definitely a shortage of developers in general,” according to John Wu, president of Ava Labs, the New York-based creator of the Avalanche blockchain, “but we have to consider quality. The space is growing so fast, things are changing so fast, what developers are doing today may not be what we need them to be doing six months from now.
Competitors agree. “If you throw 100 engineers on a project versus 10, that doesn’t mean the project is going to grow 10 times faster,” says Austin Federa, communications manager at Solana Labs, the company behind the Solana blockchain. “Some Web3 organizations have the financial backing to scale to a thousand people if they wanted to, but we don’t hire a ton of developers just because we can,” he says. “In Web3, people hire more developers when they have new problems to solve.”
Backed by the likes of billionaire Sam Bankman-Fried, venture capitalists Andreessen Horowitz, and algorithmic investor Jump Trading, the 70-person company isn’t lacking in resources or developer interest. Solana’s flagship Hacker Houses, six-day gatherings for developers building blockchain-based apps, drew more than 11,000 attendees across 18 cities this year. According to Federa, one of the goals of these events is to help so-called Web2 developers interested in the transition understand if they are up to the challenge. “It’s considered riskier to go into Web3, I think, by a lot of developers. It’s definitely a less cushy type of job to have.
Falling cryptocurrency prices, multibillion-dollar bankruptcies of some of the most trusted players — including Singapore-based hedge fund Three Arrows Capital and crypto brokerage Voyager Digital — and a wave of layoffs across the board. Established crypto companies, including exchanges Coinbase and Gemini, have only added to the industry’s woes.
In Ayala’s experience interviewing candidates, their biggest concern often comes down to industry risk: will crypto as a whole succeed or fail? How serious are the recent levels of currency volatility?
It’s no secret that Web3 companies are willing to pay handsome rewards for taking risks. Crypto startups brimming with cash from the latest bull market — a record $25 billion in VC funding in 2021, according to data from CB Insights — are offering average annual salaries of $150,000 to junior Solidity developers. The most experienced can earn $400,000 or more, CoinDesk reported, while the national average salary for software engineers is around $97,000, according to Glassdoor. “You’ll see salaries that make Web2 salaries look low, quite frankly,” Federa agrees.
More than 60% of those working in Web3 receive at least part of their salary in cryptocurrencies, according to a report by crypto-tracking platform CoinMarketCap. These already considerable sums could quickly turn into fortunes with the next big rally in prices, but can just as easily dissipate in the event of a market downturn.
The good news is that the industry has always been successful in retaining workers even during bear markets. Electric Capital estimates that the number of monthly active blockchain developers has remained stable at around 11,000, even as crypto prices have fallen more than 80% from their 2018-2019 peak.
But companies like Google, Microsoft and Amazon are increasingly vying for the same talent pool: 81 of the top 100 public companies were using blockchain technology in fall 2021, according to Blockcdata. Among Forbes’ The latest members of the Blockchain 50 list of billion-dollar companies that are seriously implementing the technology are Depository Trust & Clearing Corporation, the world’s largest aftermarket services organization, the auction house Sotheby’s, Boeing and Walmart, to name a few.
Ava Labs’ Wu is optimistic: “Not all Web2 companies have figured out how Web3 can help them,” he says. “Recent news may have slightly diminished the influx of new developers to Web3, but whoever made the decision to come, I don’t really see them coming back.”